Are there moats in software anymore?(swe2vc.com) |
Are there moats in software anymore?(swe2vc.com) |
The only real constant is motion. In 2025, software moats are not ditches. They’re treadmills. Keep running.
They have tens of millions of lines of code. An AI and ten hungry devs are not going to match that by next Friday, not even if we don't bother to restrict which year the Friday is in.
Google also has data. That's a moat that AI can't get you around, and neither can the devs.
And Google has google.com, which is hardwired into some browsers and lots of peoples' fingertips.
Yes, there are still moats. Maybe less than their used to be, maybe easier to cross, but there still are some, and they still matter.
I'd say brand awareness and being the default entry point to information is probably their strongest "moat" for search. I'd argue that this moat is being eroded in the form of competition from ChatGPT, Claude, Perplexity. Their primary revenue generator (Ads supported search) is being chipped away at by competition and they've had to pivot (LLM based search) to keep up.
I agree, unique data assets allow them to stay ahead of the competition. They are in a much more tenuous position these days though.
For new entrants in these markets, the distance between idea and implementation is getting smaller and smaller at the same time that the big players are doing more land grabs. It's quite an interesting dynamic!